Baroness Ashton of Upholland: My Lords, the noble Lord will not be surprised to hear me say that I think that programming has its benefits. In another place, the Government work through the usual channels with the Opposition parties to ensure that the critical issues are debated fully. In your Lordships' House, we have always had the privilege of debating a lot of issues, and we should continue to do so. As my right honourable friend the Leader of the Commons said this morning, the ambition is to ensure that this House is complementary to another place.

Baroness Ashton of Upholland: My Lords, I do not agree with the noble Lord, which will be of absolutely no surprise to him. It is not beyond the ability of those in the opposition parties in another place to determine precisely how they wish to scrutinise legislation. I am sure that they will be able to do that.

Lord Soley: My Lords, does my noble friend recall that debates in Westminster Hall were introduced in 1997 partly to aid greater scrutiny of the Executive? Does she also recall that the Prime Minister answers questions before a Select Committee, which was never previously done? Are there not many other examples of that type? Would it not be better if parliamentarians both here and in the House of Commons sat down and asked how they could improve the system which we operate and did not wait for governments to do things to us? It is supposed to be parliamentarians, not governments, who drive Parliament.

Baroness Ashton of Upholland: My Lords, I agree with my noble friend Lord Soley. It is important to recognise all of the changes that we have made to ensure that we are able to deal with scrutiny appropriately. It is indeed for parliamentarians to make their voices heard, which I believe is what the noble Lord, Lord Waddington, was seeking to do in this case.

Baroness Ashton of Upholland: My Lords, I would refer the noble Baroness to my comments earlier about my right honourable friend the Leader of the House, who said on radio this morning that he saw the role of this House as complementary. Therefore, he is thinking across Parliament in that way.

Baroness Ashton of Upholland: My Lords, we had a long and interesting debate about the powers of Select Committees during the passage of the Inquiries Bill. I hope that the noble Lord might look at that. Indeed, I spoke with the chairman of the Select Committee in question, Mr Wright, about the issues of concern. I think that the noble Lord will find that the powers of Select Committee are wide and varied, and I do not recall any Minister refusing to attend.

Lord Dholakia: My Lords, a little while ago there was a very critical report by the Police and Crown Prosecution Inspectorate about the prosecution and investigation of rape cases. Since then a rape action plan has been considered in terms of stocktaking. Can the Minister indicate why the success rate in convictions for rape so low and whether there is any intention to measure the situation relating to people who are falsely accused of rape?

Baroness Scotland of Asthal: My Lords, it would be right to say that the real issue is the under-reporting of rape. We know that a huge number of women are put off and frightened by the process of coming forward. We have taken that very seriously indeed and it is one of the reasons why the consultation is going to look at this matter more closely. But we have done a great deal to address this issue. We have introduced specialist rape prosecutors in every CPS area. We have overhauled the law, as noble Lords know, on sexual offences. We have created special measures to enable people to give evidence more easily. We have limited the circumstances in which the victim's previous sexual history is admissible in court and we have clarified and expanded the circumstances where evidence of the defendant's bad character is admissible. Now there is the issue as to what amounts to consent and how we should deal with it. All those matters have to be looked at in order for us to get the best and fairest system, not only for the accused but for the victim.

Baroness Scotland of Asthal: My Lords, it is because noble Lords will know that the accused is not identified prior to charge. During the arrest period, anonymity is maintained. We have debated the whole question of whether anonymity should be continued throughout the trial on a number of occasions and noble Lords will know that all the reports we have had indicate that the current balance is the fairest one.

Baroness Scotland of Asthal: My Lords, I have certainly heard of that research but I respectfully say to my noble friend that our own research—many noble Lords will have seen it—called A gap or a chasm? Attrition in reported rape cases, undertaken by Liz Kelly, Jo Lovett and Linda Regan, has looked at this very issue. They looked at the figures that were apparent in this country and, in examining those figures, they came up with 3 per cent They interrogated the cases that had been identified by the police as being false allegations. I have to say, we still live in an environment where people are very sceptical about these allegations and are quite rigorous in the way in which they approach them before cases are brought forward. That is an issue which we have to look at, too.

Baroness Byford: My Lords, while thanking the Minister for that reply, does he agree that the figure of 3,653 new herd incidents recorded in Great Britain is a disgrace? That was a 9.1 per cent increase on 2004. This disease is out of control. Does he support the comments made by Ben Bradshaw on 20 April about international experience suggesting that leaving the reservoir of wildlife untouched will prevent us containing and eradicating bovine TB?

Lord Rooker: My Lords, the noble Lord is absolutely right—pasteurisation is the key but, as in everything else, nothing is 100 per cent I understand that there are still a few dozen—maybe 40 or 50—cases a year of bovine TB in humans. That is unacceptable.

Lord Lamont of Lerwick: My Lords, I thank the Minister for that reply. Does she realise that while the Attorney-General calls the Human Rights Act one of the Government's greatest achievements, many more people will agree with the Prime Minister that it is an abuse of commonsense that we cannot extradite from this country people who have arrived here by hijacking passengers and aircraft? Who got us into this mess in the first place, and is it not time we had an urgent amendment of the Act?

Baroness Scotland of Asthal: My Lords, the comparative task my noble friend asks me to perform regarding the French system and ours would require a much longer response. There are those of us who honour our own system, and say it is sufficiently robust to respond appropriately. With regard to extradition, my noble friend will know that the Government have been working extremely hard to develop and pursue memorandums of understanding with other countries so that proper returns consistent with ECHR obligations can be undertaken. We are pursuing those with the greatest degree of energy.

Baroness Scotland of Asthal: My Lords, I take this opportunity to wish my noble friend a very happy birthday. Of course it is critical that we look with the greatest degree of care at all issues of administration to make sure we have an administrative system that is as robust and effective as we can make it. That is something my right honourable friend the Home Secretary is determined to ensure we follow through on.

Baroness Noakes: My Lords, I rise to move Amendment No. 336, which inserts a new subsection into Clause 502, which deals with the special notice procedure for removing an auditor from office. I am pleased to see that so many noble Lords are interested in this issue. My amendment requires the notice of the resolution to include the reasons for the proposed removal. In most cases members appoint auditors at the annual general meeting. In some cases the directors appoint new auditors if one resigns during the year. Quite rightly the auditors cannot be removed by the directors during the year; instead they must seek the members' approval. The auditors can submit their own representations, and in most cases the directors have to circulate them. However, the directors are not required to say why they are seeking a resolution to get rid of the auditors. Indeed, if the auditors prepare no representations, there might be no information at all available to shareholders, who need to decide how to cast their proxy votes, or whether to make the effort to attend the meeting.
	The current procedure seems designed to keep the shareholders in the dark, placing the entire burden of information on the auditors' representations. But the auditors are not seeking their own removal. In any event, the directors do not in all cases have to circulate the representations.
	A related point is Part 1 of Article 36 of the eighth directive, which the Minister told us in Grand Committee the Government do not know how to implement. This says that auditors must not be removed on the grounds of divergence of opinion on accounting treatments or audit procedures. It is highly likely that at present, when auditors are removed, it is precisely for these reasons. I rather suspect that the Government resisted my amendment in Grand Committee because it would make transparent the fact that auditor removal occurs in the very circumstances which will be prohibited by the directive.
	In Grand Committee, the Minister merely told us that implementing the directive caused problems because it might stop members getting rid of an auditor they no longer trust. The truth is that members have no role in initiating the removal of auditors, other than to approve the directors' recommendation. It is not the members' trust but that of the directors that is at issue. In the absence of members being protected from directors removing auditors if they disagree with them over auditing or accounting, we believe that the case for disclosure of reasons is doubly strong. I beg to move.

Lord McKenzie of Luton: My Lords, as has been outlined by the noble Baroness, at present a company is entitled to remove its auditor at any time by ordinary resolution and does not need to justify its decision. This provision is currently in Section 391 of the Companies Act 1985, and it is repeated here in Clause 501. The audit directive—the replacement for the eighth company law directive, which was finally adopted on 25 April—will oblige us to ensure that auditors may be dismissed only where there are proper grounds.
	We are implementing some of the new provisions in the new audit directive in this part of the Bill, notably those relating to the senior statutory auditor and to auditors' resignation statements. Other implementing provisions are to be found in Part 32. For the rest, we shall consult fully after publication of the final text of the directive before deciding how to implement it.
	The provision about the dismissal of auditors is difficult to implement in the UK. There is no distinction in the UK between the company and the members acting in general meeting. In other European jurisdictions, however, the general meeting of the members of the company can be an organ of the company, distinct from the company itself. The directive, or at least the provision in it about dismissal of auditors, appears to be predicated upon the distinction between the company and its members in accordance with which a company could act against the interests of the members by dismissing the auditors by resolution of the directors. This, however, is not possible in the UK, where not only is the company identical with the members in general meeting but it is only by resolution in general meeting that auditors may be dismissed. We shall need to do some work to find a way of constraining the company's ability to dismiss its auditors without preventing the members in general meeting being free to dismiss auditors in whom they no longer have confidence.
	In Grand Committee, and again today, it was suggested that it is fanciful to imagine the members deciding to get rid of an auditor, but in the real world the directors decide such a thing and the shareholders probably take little interest.
	It is important to remember that the provisions in UK company law and the audit directive about dismissal of auditors apply to all companies. It is not just about the small minority of companies with hundreds of thousands of shareholders; most of the companies affected are relatively small, private companies, and in most of those the shareholders are few and engaged.
	At present, such shareholders can dismiss their auditor without having to justify their decision. We believe it is right that they should be able to do that, so we need to think carefully about how to implement the new audit directive. It has to be implemented by June 2008, and we see no reason for haste on this aspect. We need to consult those affected and to find the best way of doing it. We may find that we need to introduce a statement of reasons into a notice of a resolution for removal, as in Amendment No. 336; or we may be able to use the statement of reasons that the company has to send to the audit authority under Clause 514 when an auditor leaves. In any case, there will need to be some method by which the reasons are disclosed and recorded. But that in itself is not enough: to comply with the directive, we shall also have to provide a rule that the reasons must meet certain criteria, so as to be "good reason". We will somehow need to work in the reasons that according to the directive are not to be counted as good reason.
	We shall also need to decide whether to provide specific mechanisms for challenging the reasons given and whether to provide specific remedies in the event of reasons being found to be adequate or of challenges being found to be unjustified. It is our strong view that it would be best to work out the best overall approach to this requirement in the directive, to consult widely with all of those who will be affected and then to implement it as an overall solution rather than to introduce parts of a possible piecemeal approach. Accordingly, I ask the noble Baroness not to press the amendment.

Lord Lyell: My Lords, I support the noble Baroness, Lady Goudie, and my noble friend in what they have said; particularly my noble friend, since she has considerable experience. Indeed, my own experience of auditing goes back rather like the admiral in that admirable musical "Evita" who says, "They still call me an admiral but I left the sea many years ago". It is of vital importance that the auditor should have the freedom—I hope not the licence, but the freedom—to say what needs to be said and perhaps to give all the explanations and to put totally at rest any doubts with the company shareholders or indeed with the wider world; with others who might be interested. That is why my noble friend and indeed the noble Baroness, Lady Goudie, have addressed the matter with great clarity. I hope the Government will see their way to support it.

Viscount Bledisloe: My Lords, I would like to support Amendment No. 349. Although the distinction may seem initially to be very slight, to a lawyer I think it would be very substantial. The statement which an auditor makes under Clause 510(3) will be a statement protected by privilege if he is sued for libel in respect of that statement. If the statement can relate only to the circumstances that were actually connected with his ceasing to hold office, he cannot express the circumstances where he feels that he has been removed because members of the company think that he is getting a little too close to the awkward truth.
	Surely what is needed is that he can say, "I feel that I am being removed because I am very unhappy about transaction xyz and I wish to investigate it further, and I think I am being removed because they don't want me to do that". If he can only say what has actually happened and not announce his suspicions he will be prevented by his partners from going down the latter route for fear of landing them in a massive defamation suit. Therefore, Amendment No. 349 is worthy of serious support.

Lord McKenzie of Luton: My Lords, I do not believe that there is anything in the clause as currently drafted that would prevent an auditor saying what he thought was appropriate if, in the terminology, he was getting close to the awkward truth.

Lord McKenzie of Luton: My Lords, notwithstanding that, I still do not believe that anything in the Bill would prevent the auditor making a full statement on all the issues he believes are connected with his ability to hold office.
	Clause 510 deals with the important obligation on an auditor to provide an explanation of why he is no longer going to audit a company for the benefit of the shareholders and creditors. Auditors already have this duty, and the Bill modifies it so that it is more likely that an explanation will be provided. As we explained in Grand Committee, under Section 394 of the Companies Act 1985, an auditor who ceases to hold office for any reason is required to make a statement of the circumstances only if he positively considers that there are circumstances that should be brought to the attention of the members or creditors of the company he is leaving. By contrast, for unquoted companies, Clause 510 requires the auditor to make a statement as the general rule, with the exception that he need not make a statement if he positively decides that there are no circumstances to be brought to the attention of the members or creditors.
	As we explained in Grand Committee, we are making these changes because of the importance of ensuring that whenever auditors are leaving because they believe there is a problem with the accounts or with the management of the company, they should make that known to the shareholders and to the public. The change from the 1985 Act shifts the balance in favour of disclosure, not against it. An undecided auditor at present might persuade himself that there are no circumstances that he considers should be brought to the attention of the members or creditors. He may find it more difficult to persuade himself that there are no circumstances that need be brought to their attention.
	Amendments Nos. 347 and 348 would together revert the Bill to the existing position under the Act, and the Government continue to believe that the proposals in the Bill are an improvement and help disclosure. For quoted companies, the Bill provides that auditors who are leaving are to be required to make a statement of circumstances in all cases, without any option.
	Amendment No. 349 would change the content of the statement from
	"circumstances connected with his ceasing to hold office"
	to
	"circumstances which he considers are connected with his ceasing to hold office",
	which is the nub of the noble Baroness's point. This can be seen as weakening the requirement unnecessarily. It goes without saying that an auditor, or anyone else making a statement of circumstances, will use his judgment in deciding what is relevant to include. That will inevitably be the case. I do not believe that any risk here would be avoided by the amendment. As we said in Grand Committee, there is a defence for an auditor who took all reasonable steps and exercised all due diligence, but I accept the point made by the noble Baroness made on the relevance of that provision.
	Given that defence, it is not clear whether there are circumstances in which the amendment would have a practical effect. I do not believe that there is a real problem to be solved. Nevertheless, in light of the opinions that have been expressed around the House, we will take this matter away and consider it further, because we want to ensure that we reach the right position. There is no disagreement about what we are trying to achieve. We do not see a need for the amendment, but, given the points made by all noble Lords who have spoken on this matter, I shall take it away and give it further thought, without commitment—it is an issue that we should discuss again at the next stage.

Baroness Noakes: My Lords, this small amendment, which seeks to enhance the information that members receive about a departing auditor, was suggested by the UK Shareholders Association. In Grand Committee, the Government were keen to emphasise the relationship between members and the auditors; but that is something of a myth, because, in practice, the relationship is between the directors and the auditors. If the auditor leaves office for any reason, it is right that shareholders are informed. We support in principle Clause 511, which requires the company to circulate an auditor's statements of circumstances and will be an invariable requirement for quoted companies.
	But the company can apply to the court not to circulate the notice. If it does so, the shareholder is left completely in the dark until the court has made its decision. That could put weeks, or even months, into the process. My amendment merely asks that the shareholders and others entitled to receive the accounts are informed of the application to the court so that they are on notice that there is an issue.
	The very fact that there is a dispute between the outgoing auditors and the directors is an indication that shareholders should have concerns, especially if there should be—as the Government appear to believe—a relationship of trust and confidence between the shareholder and the auditor. It is nonsense to suggest, as the Minister did in Grand Committee that, an
	"astute shareholder will be aware of the resignation".—[Official Report, 14/3/06; col. GC 425.]
	That is simply not true and it is far from the truth for the vast majority of shareholders.
	If the Government believe that shareholders have a genuine role in the auditor/company relationship, they should welcome my amendment. I beg to move.

Lord McKenzie of Luton: My Lords, again we do not have a complete meeting of minds on this issue. As I said in Grand Committee, we have sympathy with the idea behind this amendment but, on balance, would prefer to leave arrangements as they are and not adopt it. As has been explained, Clause 511 puts a duty on a company to circulate the statement made by a departing auditor. It then provides the company with an opportunity not to circulate it if it can persuade the court that the auditor is abusing his right, or—as it is intended to be amended by the very next amendment, which we have already debated—if he is seeking to secure
	"needless publicity for defamatory matter".
	There have apparently been cases where directors have gone to court for permission not to circulate an auditor's statement and not because they genuinely believed the auditor's purpose was to secure needless publicity for a defamatory matter. The directors hoped rather to delay the release of the auditor's statement because it included reasonable criticism of the directors that would be valuable to the shareholders. The directors' hope was that by the time the court had turned down their application, the auditor's statement would be stale and would not have the impact it would have had if circulated straightaway.
	In considering such a case, there is an argument that the company must inform the shareholders, although it is not clear how much good it does. All they learn extra is that the directors do not want to circulate to them the statement the auditors have made. This might be of interest to them but it may not be of great value. More importantly, we should look at the main purpose of the clause, which is to enable the company not to circulate material that is unnecessarily defamatory and unlikely to be of use to the shareholders. In such cases, it is plainly of no value to the company to have to go to the expense of informing all its shareholders that it has gone to court.
	Whereas we can see that there are cases where circulating this information might have some value, on balance we believe that it would generally have no value, and that it would therefore be inappropriate to force this extra expense on companies. I reiterate, we do have sympathy with the thrust of this point, but ultimately it is just a balance of which is the best way to take it forward. We would prefer to stick with the current formulation.

Baroness Noakes: My Lords, I thank the Minister for his reply. I accept that it is a question of balance between imposing unnecessary costs on companies on the one hand and on the other hand giving information to shareholders and perhaps even strengthening the hand of the auditors who might be being removed for reasons that are not entirely good. That has happened in the few cases which have gone to court to date where—certainly in the most recent one—the court punished the company by awarding costs against it. That did not go quite far enough because in that case the issue was kept from shareholders for a very long period of time.
	I accept that there is a point of balance and I will consult again with the UK Shareholders Association, but for today, I beg leave to withdraw the amendment.

Baroness Noakes: My Lords, can the Minister clarify this point? It is important and I would like to pursue it.
	Amendment No. 370 states that,
	"in the case of a major audit, the Secretary of State or the body to whom the Secretary of State has delegated functions".
	It does not indicate that it has to be the body to which the functions have been delegated. It implies that those persons lodging the appropriate statements can chose to which of those two they give them. The Minister repeated that point twice and I would like to be clear about it.

Lord McKenzie of Luton: My Lords, the drafting as currently before us is not as clear as it might be on that point. But the provisions before us do not only deal with the current delegations that have taken place. Who knows what might happen in the future? That is why it is important to provide the alternative. I would like to repeat that and put in on record. If anything else is needed, I am happy to write on that matter. As that delegation has taken place, the POB is the body to which those submissions should be made.
	If the company that the auditor has left is an unlisted company and not otherwise of major public interest, a statement need only be submitted in the case of an auditor's resignation or dismissal by the company and the statement is sent to the auditor's own supervisory body—for example, one of the institutes of chartered accountants—rather than to the POB.
	The second new clause sets out the company's duties when its auditor resigns or when it dismisses its auditor. The company has to inform the appropriate audit authority and send it a statement. This can either be a copy of the auditor's statement or a separate statement by the company explaining the reasons for the auditor's departure.
	The reason the company and auditor are both required to send their statements is that when an auditor resigns or is dismissed, it is quite possible that the auditor and the company will have different accounts of the circumstances. This is a requirement of the newly adopted audit directive.
	Amendments Nos. 354 and 355 would remove reference to the supervisory bodies so in practice all the statements would go to the POB. Burdening the POB—a relatively small organisation—with details of the circumstance of every auditor who resigns or is dismissed would not be of value.
	The relevant part of the audit directive refers to authorities responsible for public oversight and I am advised that the supervisory bodies can be included as they are part of the public oversight system for auditors. The supervisory bodies may have a closer interest in any case as some of the circumstances around dismissal may suggest a problem with an auditor, particularly if there is a pattern. Our intention is that the company should have the choice of whether to send any statement made by an auditor or to send its own. That is what the two paragraphs of subsection (2) of the new clause to be inserted by Amendment No. 362—linked by the word "or"—are meant to achieve.
	If the Secretary of State has delegated the functions of supervisory statutory auditors to a body, it is that body to which the auditor or the company should send their statement. That will be clear from the wording of Amendment No. 370, but we will reflect to see if anything further needs to be said. That is the clear intention and I am happy to put it on the record. I am grateful to the noble Baroness for probing this issue so we can be clear on it.

Baroness Noakes: My Lords, I thank the Minister for his reply and for updating me on the new name of what used to be called POBA. It just shows how difficult it is to keep up these days.
	I appreciate what the Minister has said. I would like to read it again in Hansard, but he has answered the point that I made on the duplication of information flow. I hope that he will look again at the drafting as it is ambiguous whether or not there is a choice of which route information should go. If there is a choice, it is a recipe for administrative problems. I put it no higher than that. I beg leave to withdraw.

Baroness Noakes: My Lords, the Minister has dealt much better on Report with the issues raised by the amendments in this group than he did at Grand Committee. Had he given that explanation at Grand Committee, I would not have tabled the amendments at this stage. As the noble Lord knows, I am a fighter against waste in government and I was seeking to avoid the DTI creating a new department of auditor resignations, replete with staff at all grades, ready with their filing systems and processes to take lots of reports. In the light of the Minister's explanation, I am satisfied on that point and I shall not move the amendment.

Lord Goldsmith: My Lords, I will also speak to the nine other government amendments to chapter 6 of Part 16. When we discussed this in Committee, I agreed that we would take these provisions away. We believe that, together, the amendments clarify and improve the provisions on auditors' liability. They will both meet the concerns that were expressed in Committee and achieve the effects intended by the other 13 amendments to this chapter.
	For the record, the other government amendments that I need to speak to are Amendments Nos. 374 and 375, 379 to 381, 387, 391, 392 and 394. I will also speak to Amendments Nos. 376 to 378, 382 to 386, 388 to 390 and 393, and in due course Amendment No. 391A, which is grouped with them.
	The main changes intended by the government amendments are these. In the new clause to be inserted after Clause 522 by Amendment No. 380, subsection (4) would make it clear that liability limitation agreements can be expressed in any way and are not—as some feared might be the case, based on earlier wording—restricted to being expressed as pure monetary amounts or such amounts expressed with reference to a formula.
	Amendment No. 391 clarifies that, when the court is considering what is "fair and reasonable", it should not take into account,
	"the possibility of recovering compensation from",
	any other people involved, nor any other,
	"matters arising after the loss or damage . . . has been incurred".
	I hope your Lordships will agree that those two changes improve the drafting of how these clauses achieve the intended policy objective. Noble Lords had raised a number of concerns about possible misinterpretation of the text, so we thought it best to try and put that beyond doubt.
	In addition, subsections (2) and (3) of the new clause inserted by Amendment No. 380 introduce a new power for the Secretary of State to make regulations about how liability limitation agreements are expressed. I should explain why we propose to bring that in. It has been suggested to us, mainly by the mid-tier accountancy firms, if I may so describe them, that there is a risk of liability limitations developing in a way that would damage competition in the audit market—particularly if limitations are expressed as fixed monetary amounts. While we would not expect liability limitations to have that effect on the market, we have thought it prudent to take this power so as to be able to respond if there should be problems. In that way, it would enable us to bring forward regulations that either prescribe what sort of provisions must be included in agreements, or specify provisions which must not be so included.
	There are a number of more minor improvements in the drafting of these provisions that I will be happy to explain in detail if necessary. Meanwhile, I beg to move.

Lord Sharman: My Lords, I thank the Minister for the response that the Government have made to the concerns I raised in Committee. Amendment No. 408 was proposed to us by the Law Society. I accept that it is a wide enabling amendment. I would like to consider carefully the impact of the government amendment and, if appropriate, return to this on Third Reading, but in the circumstances I will withdraw the amendment at this stage.

Lord Sharman: My Lords, I rise to move Amendment No. 398 and to speak to Amendments Nos. 399 to 403. These amendments go back to an issue we raised in Committee. The amendments, all in Clause 530, deal with the intention behind the issue of shares. The purpose is to ensure that a test should be one of intent, rather than an objective test of whether the securities are likely to get into the hands of the public at some stage in the future.
	Amendments Nos. 398, 401 and 403 propose that "calculated" be replaced by "intended". In Grand Committee, the noble Lord, Lord McKenzie, rejected these arguments by giving us an explanation from the Oxford English Dictionary—the meaning of "calculated to" was "designed or suitable, intended". He went on to say that,
	"if it came to court, an objective assessment would be required of whether the motivation or purpose behind the offer was to make the shares . . . available".
	He added:
	"it is not a question of how likely or probable it was that the shares would become available to other persons",
	and that,
	"we want the provision to provide an objective test of intentions".—[Official Report, 14/3/06; cols. GC 462-63.]
	However, I am advised that there is judicial authority to the effect that "calculated to" means "likely to" and not "intended to". That is apparent from the judgment of Dyson J in Norweb plc v Dixon. There is clearly therefore a conflict between the view of the courts and the view of the Oxford English Dictionary as interpreted by the noble Lord. To clarify the position, we feel that the Bill should be amended to use "intended" rather than "calculated", since this is the meaning that the Government intend.
	Amendments Nos. 399, 400 and 402 are to address the effect of shares or debentures becoming available to third parties outside the arrangements relating to the offer. Again, in Grand Committee the noble Lord, Lord McKenzie, accepted that a company should not be held responsible for what the recipients of shares or debentures do with them after they have received them, as long as part of the arrangements or understanding reached at the time the offer was made was not that the shares or debentures would be passed on. These amendments are proposed in order to give effect to that view.
	We are concerned that the clause, as now drafted, goes further than the existing law—under Section 724A of the Companies Act 1985—and adds further restrictions on the ability of a private company to make a rights issue or to offer shares under an employee share scheme. I have said enough on that, but if no law is intended, we are too restrictive in what we have. I beg to move.

Lord McKenzie of Luton: My Lords, the nub of the debate is whether we believe there should be an objective or subjective test, whatever wording we use to express that. The Government are clear that we should maintain, as at present, the objective test.
	When we discussed these amendments in Grand Committee, I explained why we do not wish to replace the word "calculated" with "intended". I maintain that "calculated" is the correct word for the purposes of Clause 530. The phrase,
	"properly be regarded, in all the circumstances, as . . . not being calculated to result, directly or indirectly, in securities of the company becoming available to persons other than those receiving the offer",
	imposes an objective test. If it came to court, an objective assessment would be required of whether the motivation or purpose behind the offer was to make the shares or debentures available to persons other than those receiving the offer.
	I am aware that the Law Society has raised the case of Norweb plc v Dixon, in which the court said that "calculated" means "likely" and does not mean "intended". The test imposed by the word "calculated" is not one of actual intention, which is what was being alleged in Norweb plc v Dixon, but nor is it purely a test of mechanical likelihood. It cannot possibly be solely a question of likelihood as, in almost all cases, it is likely that the shares will one day be transferred.
	The test is whether a person looking objectively at the facts would conclude that it was intended. Amending "calculated" to "intended", as the amendments propose, would make a big change to the operation of the clause. It would replace the objective test with a wholly subjective test of intention. Rather than reaching a judgment as to what a reasonable person would conclude was the intention, the courts would require proof of actual intention. It would be very easy for those behind the offer to stand up and claim that nothing of the sort was intended, and very difficult for anyone to contradict them. Actual intentions would often be extremely difficult for those not directly involved to prove, rendering many breaches virtually unenforceable.
	Likelihood is, of course, relevant to any objective assessment of intent, but it is by no means the sole factor or only way of establishing apparent intent. The likelihood of the shares becoming available to the public is simply one of things that might be relevant, such as what was said and done at the time. It all goes to the evidence enabling the court to make its judgment. The courts will take into account the circumstances of the offer in their entirety, not only the likelihood of the shares becoming available to other persons.
	"Calculated" is not the same as "likely" or "intended". If we wanted to mean precisely either of those things and nothing else, we agree that it would be better to say so. But we do not. The word has been quite deliberately chosen and has been used in this context for a long time. The law currently requires an objective assessment of intent. The Bill takes the same approach. I hope that the noble Lord will not press the amendment because it would change significantly the current position.
	Turning now to Amendment No. 399, in seeking to clarify subsection (3) the amendment risks widening it. Subsection (3) is an exemption setting out circumstances in which an offer will not be regarded as an offer to the public. In order to fall within the exemption, the offer must not be calculated to result in the shares or debentures becoming available to persons other than those receiving the offer. Of course, shares may be offered in the knowledge that they may one day be sold on. Companies do not have to impose restrictions on the transferability of their shares in order to take advantage of the exemption. But the exemption is not to be used as a means of evading the public offer prohibition by offering shares to a particular person, simply so that they can then offer them on to other people. It is a matter of the link or connection between the offer and the subsequent transfer of the shares to other persons. If there is no real link between the two, other than the fact of issuing the shares, the exemption may apply. Where there is a close connection between both events, however, of which formal agreements or mutual arrangements are probably the strongest example, the exemption should not apply.
	The amendment focuses too narrowly on arrangements for understandings reached as part of the offer. The perspective of the company offering the shares can also be relevant, whether or not it amounts to an arrangement or understanding shared by the recipient of the securities. The amendment restricts the circumstances the court can look at to the offer itself and arrangements or agreements made in connection with it. It may be difficult to show the existence and contents of such arrangements or understandings. It is surely preferable that the court should be able to have regard to all the circumstances, as the opening words of the exemption provide.
	I turn now to the other amendments to delete subsections (4)(c) and (5)(c) in Clause 530. Subsection (4) provides that an offer is not to be regarded as an offer to the public if certain requirements are met. It is an exemption for offers made to persons already connected with the company. One of the requirements is that the offer must not be calculated to result in the shares or debentures becoming available to persons already connected with the company.
	The exemption set out in subsection (4) is expressed rather differently in Section 742A of the Companies Act 1985, from which this exemption is derived. Our intention was to set out more clearly how the exemption operated, but in doing so we agree that subsection (4)(c) has departed from the current law. Therefore we agree that the approach of the present law should be reinstated. That is not simply a matter of deleting subsection (4)(c); it will be necessary to put back in its place the elements of the current law that the subsection was intended to replace, and it might not be straightforward to draft. The same applies to subsection (5)(c). We therefore agree to consider Amendments Nos. 400 and 402.
	I hope the noble Lord will withdraw Amendments Nos. 398 and will not press Amendments Nos. 399 to 403. I cannot stress strongly enough that what is proposed here would be a significant change in the law from the current position, and we do not believe that is the right way to go.

Lord Sharman: Yes, my Lords, I do. The only issue between us is precisely the one he mentioned up front; that is, the question of whether the words reflect what we are seeking to achieve. In the opinion of the Law Society that is not the case. I will look at what he said, and I will probably discuss it with the Law Society before I decide whether I wish to push the thing any further. In the meantime, I beg leave to withdraw the amendment.

Lord Razzall: My Lords, this is another amendment to Clause 530, which defines what is meant by an offer to the public with regard to the prohibition of public offers by a private company. The starting point for this amendment is the point I made in Grand Committee; that the current interplay of the various regulations creates uncertainty concerning the number of individuals to whom an offer can be made by a private company. I could count in large numbers of filing cabinets the letters I have seen from firms of lawyers which, when asked whether a particular offer can be made by a private company, go on to describe regulations for three pages, but ends up with the position still uncertain.
	The purpose of this amendment is to clarify the position that an offer is not regarded as an offer to the public if it is made to fewer than 100 people by a private company, or under the other conditions set out in that amendment. When this amendment was discussed in Grand Committee, the Minister said:
	"I stress again to the noble Lord that there is no number which is allowed".—[Official Report 15/3/06; col. GC 478.]
	In another reply, he said:
	"We do not consider that private companies should be offering their shares to strangers".—[Official Report 15/3/06; col. GC 472.]
	I will let the noble Lord, Lord McKenzie, into a secret: it is entirely common practice in the City for private companies seeking seedcorn or development capital to do so from outside investors or private equity funds, without being obliged to register as public companies. Indeed, his answer would mean that an offer of shares to even two people unconnected to the company could be treated as an offer to the public—a view that goes beyond any understanding of either the existing law or what the law should be.
	The second argument of the noble Lord, Lord McKenzie, was that in cases of doubt a company could easily re-register as a public company. I can do no better than refer the noble Lord to the final report of the Company Law Review, which said:
	"We believe that private companies should not feel obliged to take the unnecessary precaution of registering as a public company, with the tighter regulation that this entails, simply because the existing provisions lack clarity".
	There are significant disadvantages for companies with a small number of shareholders in having to re-register as public companies. It certainly goes beyond current practice in the City and elsewhere.
	The final point I would like to make is that the Company Law Review went on to recommend the retention of the basic prohibition against private companies offering shares to the public, but with a power to prescribe detailed exceptions to the prohibition by statutory instrument. It referred to the definitions in the old Public Office of Securities Regulations. The second purpose of this amendment is to provide for an enabling power along those lines, which could then allow further consultation and consideration before regulations are brought in. I hope that, with the assistance of the Law Society and others, I have dealt with the reasons why the noble Lord, Lord McKenzie, rejected this amendment in Grand Committee and I hope he will reconsider. I beg to move.

Lord Razzall: My Lords, is the noble Lord saying under Clause 530(3)(a), any firm of stockbrokers can send out any number of offers of any number of shares to any number of individuals provided that there is no mechanism for those shares to be traded in any way and to be transferred from the individual who has received the offer? Does a private company with, for example, 120 shareholders have to re-register as a public company if it wants to create a market in its shares? Is that the noble Lord's understanding of the provision?

Lord Razzall: My Lords, I thank the Minister for his answer. This is obviously a detailed practical issue. I shall read what he has said in Hansard and perhaps have another conversation with him, to which I look forward. In the meantime, I have pleasure in begging leave to withdraw the amendment.

Lord Hodgson of Astley Abbotts: My Lords, in moving the amendment I shall speak also to Amendments Nos. 419B to 419G inclusive. These insert new clauses before Clause 552 in Part 18 of the Bill, which is concerned with the allotment of shares. At the same time, I shall speak to Amendments Nos. 439A to 439E, which are concerned with Part 19 share capital, particularly Clauses 590, 591, 592 and 593, all of which are concerned with the transfer of securities.
	The amendments comprise two shots at one issue—we come back to the issue of consolidation, which we have discussed and battled over from the moment that the Bill was launched. We remain of the view, as stated at Second Reading, that the Bill should be as far as possible a comprehensive consolidation of company law, and that it defies belief that despite all the hard work that has gone into it from the Bill team, officials in the Minister's department, we would still be left with three other Companies Acts when this one leaves your Lordships' House.
	The first set of amendments to Part 18 aim to clarify the law regarding pre-emption and allotment. Our practitioner advisers have told us that this is an area that is frequently consulted and to have it spread out over the Bill and the other Companies Acts is an unhelpful and undesirable position. The second set, which concerns Part 20, is intended to ensure that the provisions relating to the transfer of securities are in one place; in particular, Section 207 of the Companies Act 1989, which inexplicably has been split between that Act and this Bill as currently drafted.
	We tabled these amendments in Committee and we were disappointed by the Minister's reply. I dare say that he is not going to accept the amendments tonight, but I hope that he will be able to give us some better news about the prospects and about the Government's plans to achieve further consolidation, either next week or through the passage in another place. Since it is the opening of the cricket season, I regard the amendment as a slow full toss bowled on the leg stump, which I hope he will dispatch immediately to the boundary. In that spirit I beg to move.

Lord Sainsbury of Turville: My Lords, in Grand Committee the noble Lord, Lord Hodgson, tabled an amendment to Clause 566 which if accepted would have completely removed the proviso presently in subsection (1B) of this clause that a company can reduce its share capital in any way under Clause 566 providing that,
	"as a result of the reduction at least one member of the company would hold shares other than redeemable shares or shares held as treasury shares".
	We were unable to accept that amendment in Grand Committee as it would have enabled private companies who wished to use the new solvency statement procedure to use that procedure to reduce their share capital to zero. That is undesirable.
	In Committee the noble Lord, Lord Hodgson, explained that there may be circumstances where a company would want to reduce its share capital to zero; for example where the company is the target of a takeover bid and wants to cancel all of its own shares and issue new shares in the acquiring company. The noble Lord also explained that it is relatively common practice for a reduction of capital which is approved by the court to involve a reduction of the shares' capital to zero. We understand, however, that this is only on terms that the court can see that very shortly after the reduction taking effect, either a reserve will be capitalised in favour of someone who becomes the member or one or more shares are subscribed conditional upon the reduction taking effect. Thus the concern which prompted us to incorporate the provision—namely, a company being left without any issued shares—is not one that arises in the context of reductions confirmed by the court.
	Having discussed this matter with the Law Society, we agree that subsection (1B) of Clause 566 does not achieve the desired effect. In particular, we do not intend either to fetter the powers of court or to reduce the flexibility that is currently afforded to companies limited by shares which apply to court to reduce their share capital under Section 135 of the 1985 Act, which is amended by Clause 566. I am grateful to both the noble Lord and the Law Society for raising this point.
	Amendment No. 423 is designed to address the noble Lord's concerns. It limits the qualification that is presently in subsection (1B) of Clause 566 to private companies who wish to use the new solvency statement procedure to effect a reduction of capital. Amendment No. 424 provides a different drafting solution to the perceived problem, but, with the exception of what I am about to say about the reference to treasury shares in subsection (1B), the drafting solution which we have proposed in Amendment No. 423 achieves the same effect as this amendment. I therefore trust that noble Lords will agree to the amendment.
	The deletion of the reference to treasury shares in subsection (1B) has been proposed because a private company may not hold its own shares in treasury, and since the redrafted proviso now applies only to private companies seeking to reduce their share capital under the new solvency procedure statement—whereas previously the proviso applied to both public and private companies—it is no longer necessary to refer to treasury shares. I beg to move.

Lord Sainsbury of Turville: My Lords, Amendments Nos. 429 to 431 in this group are required to achieve consistency with the approach taken elsewhere in the Bill with regard to the replacement of the current requirement for a statutory declaration with a requirement for a simple statement by the directors. They replace various references, currently in Sections 172 to 179 of the 1985 Act—which relate to the purchase or redemption of shares by a private company out of capital—to "statutory declaration" or "declaration" with references to "directors' statement" or "statement".
	Amendment No. 432 is consequential on Amendment No. 429. It simply restates existing subsection (3) of Clause 576 which deals with the requirements as to notice where a company makes a payment out of capital in respect of a purchase or redemption of its own shares.
	Amendment No. 488 brings two offences which are still extant in the 1985 Act and which relate to a purchase or redemption of own shares out of capital into Schedule 4 of the Bill. These offences are currently set out in Schedule 24 to the 1985 Act—which is to be repealed. These are minor amendments which improve the drafting of the Bill and I trust that noble Lords will have no objections to them.

Lord Sainsbury of Turville: My Lords, as we discussed in Committee, these amendments concern the distribution of profits and the payment of dividends. I am grateful to my noble friend Lady Goudie for raising this important issue. We are very aware of concerns about the current rules that link the payment of dividends to realised profits. These have become more acute for public companies because of the application of new international accounting standards to the treatment of some elements of income and expenditure, and the consequent effects on a company's accounts.
	The proposed Part 19A would, of course, apply only to private companies, not to public ones. However, it would have relevance for public companies as it would affect their private company subsidiaries. As noble Lords may be aware, the EC's second company directive constrains what we can provide in respect of public companies. The Commission has undertaken to review distributions in the context of wider capital maintenance issues, and is beginning the process with a study of the issues. The likely outcome of that work is not yet clear.
	In the meantime, companies' experience of the International Financial Reporting Standards is in its early stages, the first full year of IFRS accounts having just finished, and views on the issues that cause most difficulty in presenting accounts are still evolving. We have continued to keep in contact with representative bodies and companies that have made representations to us in the course of the Bill's passage. They are gathering and assessing data from the last year, which we will discuss further with them when more information is available. In that respect, the work that the accounting institutes, among others, have done in promoting awareness of the issues with the International Accounting Standards Board has been successful. Recent indications are that the board will, at least, look at ways of easing difficulties in determining the cost of a subsidiary on transition to IFRS.
	We believe that we should assess the need for any change in the light of all information available to us, including the new information that interested parties are collecting. We do not believe that the proposed new clause has the right way forward. The proposed solvency test would only require directors to consider debts falling due in the next year, thus allowing the company to pay a dividend even though its long-term liabilities might exceed its assets. For the longer term, there would be no clear rules—none in the Bill, certainly—to prevent the dissipation of assets for long-term obligations such as pensions.
	While the amendments' approach is thus not the right one, we agree that it would indeed be desirable to have flexibility to tackle the issue. Therefore, in the light of our decision to drop the reform power, we will be bringing forward a power in relation to capital maintenance matters. While we agree that this area requires attention, that needs to be done in a slightly broader context than the one here. These amendments do not meet the issue without having some other undesirable side-effects. I hope that, in this light, the noble Baroness will not press her amendment.

Lord McKenzie of Luton: My Lords, I shall speak also to Amendments Nos. 441 and 442. Amendment No. 440 is designed to address a problem raised in Grand Committee by the noble Lord, Lord Hodgson, on behalf of the Law Society. References in the clause to a company's shares currently exclude any shares held as Treasury shares. The effect is to prevent companies being able to discover who had an interest in any of the past three years in those of their shares which they now hold as Treasury shares. The amendment would remove that unnecessary exemption of treasury shares from Clause 595.
	Amendments Nos. 441 and 442 address further points raised by the noble Lord, Lord Hodgson. He tabled an amendment in Grand Committee which sought to clarify the time limit in respect of the requirements of Clause 605(3). Amendments Nos. 441 and 442 achieve that clarification by moving the time limit to subsection (2), so that it applies to the basic entry of information on the register of interests disclosed, which must now be made within three days of receipt.
	Before we leave Part 21, I take this opportunity to advise noble Lords that we undertake to table at Third Reading further amendments to Clauses 859 to 861, which currently appear in Part 33 and which implement the transparency directive in UK law. I am happy to expand on that if noble Lords press me, but I take this opportunity to put them on notice. In the meantime, I beg to move.

Baroness Barker: My Lords, I too thank the Minister for repeating the Statement made in another place. Since this Government came to power there have been seven reorganisations of the National Health Service. The announcement today marks the eighth and ninth. The NHS could have wanted nothing less.
	As the noble Earl said, four years ago regional health authorities were abolished. Today's announcement begs the question of whether the Government were right then to abolish health authorities or whether they are right now to recreate them in a new form. They must have been right at one point and wrong at another. Would the Minister tell us which?
	Secondly, today's Statement made much of the anticipated savings of £250 million. Would the noble Lord tell us the evidence for that figure? In January the Health Select Committee, writing on the subject of PCT reorganisation, said that at best it could estimate savings of between £60 million to £100 million. How was that figure of £250 million arrived at and will it be recurrent? Furthermore, can the Minister tell us the anticipated number of redundancies of managers and how will that interplay with the number of frontline staff currently being shed by trusts?
	The Minister said in the Statement that there would be an achievement of 70 per cent coterminosity with social services. On behalf of my colleagues, I welcome that the Government have in some cases listened and changed their proposals, particularly on coterminosity in some parts of the country. Given that coterminosity of PCTs and social services remains the same in London, and they represent 32 out of 152 trusts, there must be a substantial part of the rest of the country where there is no coterminosity. Given that the numbers of older people—particularly heavy users of ambulance trust and PCT services—live in areas that are not coterminous and given that at the same time social services are having to deliver against a background of 15 per cent cuts and savings, can the Minister say what the Statement means for the future integration of health and social care services?
	I too wish to make some points on ambulance services. I echo the noble Earl's feeling that bigger is not necessarily fitter for function, but given that ambulance services are going to be reorganised at the same time as the reorganisation of police forces, can the Minister say what the implications of that would be for co-ordination of emergency work? Furthermore, if ambulance trusts are to cover much wider areas, what is going to happen to people in rural areas? How will this reorganisation ensure that there is equity between those who live in rural areas and those who live in larger urban areas, whose demands on the ambulance service can be particularly high—particularly high at key points such as evenings and weekends?
	This restructuring is to be implemented by October this year. It is being introduced at a time when practice-based commissioning is being rolled out. It is the structural backdrop to the implementation of the White Paper and is being introduced when there is a great deal of uncertainty in all the different parts of the NHS, such as NHS Direct, which this week announced a whole load of job cuts too. Will the targets that PCTs are supposed to achieve, particularly in things like roll-out of practice-based commissioning, be altered in any way while they try to find their way though what seems inevitably to be a summer of job cuts and a winter of confusion?

Lord Warner: My Lords, there is quite a lot there to respond to. I will do my best to give coherent responses to the points made by the noble Earl, Lord Howe, and the noble Baroness, Lady Barker.
	Both raised the issue of redundancy. The £250 million is a conservative estimate of the savings likely to be made—a mixture of staff and non-staff savings, including real estate issues. When people study the changes more closely, they will see that there is a lot of emphasis on sharing back-office services and, in some cases, sharing management systems and doing joint commissioning, too. Some of these provide scope—confidently, we think—for £250 million, which will be a recurring saving. It is worth bearing in mind that the redundancies are a one-off payment to secure those recurring savings. We confidently predict that we will get four-year savings in 2008-09 and these will go, as I said when repeating the Statement, on front-line services. These will help particularly with areas around long-term conditions and some front-line services in acute services.
	On removing provider functions from PCTs, the Secretary of State, Patricia Hewitt, has made clear on a number of occasions—as have I—that we have no intention of requiring PCTs to divest themselves of their provider functions. However, the trusts will need to continue to ensure that the provider services in their area are fit for purpose. That is why we will be going through, as I said in the Statement, a process of ensuring their fitness for purpose, so that they can ensure that the right services are in place to meet the needs of all the people in their communities, including those in the areas of greatest deprivation, some of whom need new providers and alternative providers to be in place.
	Coterminosity was welcomed by the noble Baroness, Lady Barker. We have significantly increased coterminosity with social services through these changes. That was a big issue in the public consultation, which led to the White Paper. People want their services to be integrated. It was not possible to achieve 100 per cent coterminosity. We listened carefully to what local stakeholders said and we have adapted some of the proposals to meet those concerns. There is a balance to be struck in some parts of the country between coterminosity and meeting the needs of health inequalities—also having bodies in place that carry a great deal of public confidence. There is not a lot of point in going through an exercise where more than 12,000 people turn up at public meetings to debate and many more write in with their views, and not listen to those views—particularly where front-line staff such as GPs express their views on the most suitable configuration at a particular local level.
	I hear what both noble Lords say about big not necessarily being beautiful in relation to ambulance trusts. I note the welcome of the noble Earl, Lord Howe, for the arrangements in Staffordshire. We listened to the advice that was given to us by our National Ambulance Adviser, as I made clear in the Statement. Peter Bradley consulted with a considerable stakeholder group before he fashioned the advice in the report mentioned in the Statement. His views were not the same as those of Roger Thane of Staffordshire—who, let me remind the noble Earl, has resigned and is no longer the chief executive of Staffordshire. Mr Thane has his views—he is entitled to them—but they are not the views expressed by our National Ambulance Adviser and are not necessarily the views which are shared by a large number of people in the ambulance service. We think it is essential to listen to that advice because it makes clear that a number of trusts need to be larger in order to provide the infrastructure and the capability to cope with the changing needs placed on our ambulance service.
	As to rural areas, these proposals will not change front-line services or where ambulance stations are located. There is nothing in the proposals which will require any ambulance trust to change its ambulance stations. Of course, over time, in all places, ambulance stations occasionally have to change because populations have the inconvenient habit of changing and people move to different parts of the country, but there is nothing in the proposals which in any way disadvantages rural areas.
	I have tried to deal with most of the points raised. I refute absolutely whatever is attributed to Sir Nigel Crisp in regard to changes driven by the manifesto. It is very clear that we need to strengthen the commissioning function in PCTs. The introduction of practice-based commissioning—which I can confirm we are still aiming to have in place across the country by the end of this year—changes the dynamic; it tends to push in the direction of larger PCTs and more combinations of PCTs because of the functions being carried out in the commissioning sector by GPs.

Lord Hodgson of Astley Abbotts: My Lords, I rise to move Amendment No. 464 and speak to Amendments Nos. 465, 468, 471, 472, 473 and 475, which concern Clauses 634 and 635. I must apologise to the House, as Amendment No. 469 somehow got tabled in error. I do not think it should be in this group at all, and we will not be seeking to move it.
	This takes us to a proposal that we believe still looks suspiciously like gold-plating of the EU takeovers directive. We have just discussed this in Grand Committee, and the noble and learned Lord the Attorney-General said:
	"The starting point is Article 17 of the takeovers directive, which requires member states to put in place sanctions which are 'effective, proportionate and dissuasive'. That is to ensure the rules of the directive are complied with".—[Official Report, 28/3/06; col. GC 304.]
	The directive therefore requires that a failure to comply with the rules about bid documentation must be subject to sanctions of the kind that satisfy Article 17. The Government have so far taken the approach that only a criminal offence will do, stating that they do not believe the panel will otherwise have sufficient power to take effective action, in directive terms, against any such failure.
	The sanctions attributed to the panel, which the Government believe are insufficient for this purpose, are these: public and private censure or reporting of conduct to another regulatory body, as well as action to issue directions to those responsible to put the matter right. This list has overlooked a further power the panel has under the Bill that I believe would adequately satisfy the requirements of Article 17: the power to order a person to pay compensation under Clause 636. In conjunction with the sanctions I have just listed, that seems to be ample penalty to provide an adequate deterrent as required by Article 17 of the directive.
	There is another reason why we on these Benches say this is not an appropriate area for a criminal offence. The proposed offence would be for failing to comply with offer document rules. Those rules are made by the Takeover Panel itself. As we discussed at length in Grand Committee, the panel is now to become a statutory body, with all the associated powers that come with that status. However, it will retain much of its independence. We will have a situation where an independent body, subject to very little formal parliamentary scrutiny, will be able, by altering its rules, to create new forms of criminal offences. We wonder whether that is a desirable outcome.
	For those noble Lords who were not present in Grand Committee, I am not arguing for greater control of the panel. As I said then, the panel has been a great success, and we do not wish to clip its wings with unnecessary bureaucracy. We would therefore argue strongly against limiting the independence of the panel simply to permit a criminal offence for failure to meet the rules about bid documentation in order to comply—or, in our view, to over-comply—with the EU takeovers directive. Surely, the simpler and correct approach is to allow the panel to deal with such a breach by means of the sanctions under the Bill, which more than adequately meet the requirements of Article 17?
	Since Grand Committee, we have carried out a little research into how other European states have implemented the directive. Our advisers tell us that in Ireland, for example, where they already have a statutory framework, when rules on offer document contents are breached it appears to be a civil liability. We are told that the same is true in Germany. If these states, which are subject to the same directive as this country, do not see the need to implement this as a criminal offence, there is no reason why the Government should feel so compelled. Therefore, in light of this new information, I beg to move Amendment No. 464, which I hope the Government will feel able to accept.

Lord Goldsmith: My Lords, we have discussed the persons subject to the offence, and we will come back in the amendments to the position of those who are directors of corporate bodies standing behind a bid. We debated this in Grand Committee. I emphasise that we have looked at that. I hope noble Lords will recognise that in this area, as in others, we have listened very carefully to what has been said by Members opposite, those on the Liberal Democrat Benches, and others who have participated. Where we have seen that there is a point, we have responded to it. We responded very substantially earlier today to the amendments I have been dealing with concerning auditors' liability and directors' duties. We have looked at this and seen that there is a need to make some refinements to those who are subject to it. As the Government responsible for implementing the directive, we take the view that unless we have an offence—albeit a light-touch offence—we will not be meeting the terms of the directive.
	There are good reasons why the panel's powers would not be adequate if it was not prepared to exercise those powers after the event. That area needs to be met. Where the Government have taken the view that they need to do something to meet their international obligations, the House would be very slow indeed not to accept that, particularly given that, at the end of the day, the only person at risk would be somebody who knew that an offer document did not comply and was reckless as to whether it complied, but went ahead with it anyway.
	The noble Lord, Lord Patten, was concerned that this might frighten practitioners. Someone who knows that he is putting forward a document that is non-compliant or is reckless about doing so should, in a sense, be frightened. He ought to be doing it right. I am sure that those participating in this debate have been personally involved in offer documentation, as I have, and know the huge amount of attention that all practitioners pay to what is going on. Only someone who is really reckless or intent on breaking the rules will find themselves in breach of this provision.

On Question, amendment agreed to.
	[Amendment No. 467 to 469 not moved.]

Lord Goldsmith: My Lords, I recall the debate in Grand Committee and the reaction when I answered the question in the way that the noble Lord quoted. I will try to explain where the difficulty lies. Article 11.4 of the takeover directive uses a concept unfamiliar to English company law in terms of its language; that is, it talks of the offeror holding 75 per cent or more of the capital carrying voting rights. It is the concept that the noble Lord wants to insert by way of amendment, but it is not in itself a concept that is presently familiar to the English companies market, if I may put it that way. So we have tried to use an expression that will be familiar to the English company market rather than using that phrase.
	If one is looking to see what is 75 per cent of the capital carrying voting rights, I stand by saying that in the majority of cases normally one would find that by looking at the nominal value of the shares and seeing whether they hold 75 per cent or more. Plainly in the case where we have only one class of share, no difficulty at all arises. In the situation where one has more than one class of share, no real difficulty may arise; there may be some difference in the market value of the shares at a particular stage but the voting rights may still appear to be broadly comparable to the nominal value.
	What will the court make of it? The words in the Bill do not say "nominal value"; they say, "value". It has been left in that sense so that it will be for the court to interpret what is meant. I answered the question because I was asked and it is right that we should indicate what we think. How will the court interpret it? The court will need to interpret this provision in the same way as it would interpret other provisions in a statute where it is plain that the intention has been to implement a directive. So I have little doubt that they will look at the directive and say that in understanding it they need to understand that it is intended to implement the requirements of Article 11.4
	I doubt whether it will make much difference in many cases. There may be some cases—this is where the concern may have arisen over what I said—where the structure of the company is such that the court would say that if we are really looking at 75 per cent of capital carrying voting rights, it is not appropriate on this occasion just to look at the nominal value because the structure of the company is extraordinary: someone has 90 per cent of the nominal value for virtually nothing and the rest of the shareholders, who have only 10 per cent of the nominal value, have the real bulk of the company. I can see that one could have such a company and in those circumstances the court may say that 75 per cent of value in that context is to be interpreted in a different way. But in many cases—perhaps the majority—75 per cent in value of all the voting shares would be taken to mean the nominal value for the reasons that I have given.
	So it is not straightforward: we do not know what the European Court of Justice would make of capital carrying voting rights, or 75 per cent of those in any event. That could influence what the English court ultimately made of any of this. In most cases, whether the breakthrough provision is calculated on the basis of nominal or market value, the result would be exactly the same.
	The point is that the amendment proposed by the noble Lord does not add any greater clarity because it uses an expression that does not mean much in itself. The provision as we have it in the Bill will have to be interpreted against that background. So the noble Lord can feel reassured that when it comes to interpreting what is meant by value, what is going to matter is not what I have said about it but what the court makes of the clause against the background of the directive.

Lord Goldsmith: These amendments take up discussions we had during Committee as to the precise meaning of some of the other complex provisions of the takeovers directive. We have returned to Article 11. The provisions of that directive are given effect to by chapter 2 of Part 22 of the Bill. The amendments are concerned with the types of "securities" falling within the scope of the directive.
	On its face, the takeovers directive is relatively explicit on this point. It states at Article 2 that "securities" means,
	"transferable securities carrying voting rights".
	That short definition cannot be expected to cover in detail a whole range of different security instruments that exist across the EU. We must work out what principles it lays down. For the purposes of the domestic implementing legislation, we talk of "shares" rather than "securities", as we think that that is more natural in terms of existing companies legislation..
	So, we need to capture the concept of "shares carrying voting rights". There is a long-standing argument as to whether that means voting rights in all circumstances, or whether it includes voting rights that arise only in exceptional circumstances. For example, with some "preference shares", there will be a right to vote, but that will arise only when the dividend has not been paid. There will be other categories of shares that carry no voting rights, except on specific matters, such as any variation of the class rights relating to those shares.
	In the UK, different types of shares are not defined. Instead, the voting rights and the other rights attributable to the shares are generally prescribed, in the first instance at least, by the articles of association. The inevitable result is that there are many variations on the types of shares that can exist.
	By these amendments, we seek to cut the Gordian knot. They would provide that, in determining the breakthrough threshold and the mechanics of the operation of breakthrough, where the different interpretation has real practical effect, shares that do not normally carry rights to vote at general meetings will be excluded. We think that that drafting reflects the policy intent of the directive. It benefits from being absolutely clear whether a share is a voting share or not, at least in the vast majority of cases. In the most exceptional cases, that matter might have to be determined by the court; but we would have gone a long way to avoid the need for that. Parallel amendments on this matter are also proposed regarding Clauses 651 and 654.
	Perhaps I may conclude with two further observations. First, companies can help themselves. Breakthrough has not been imposed on UK companies and we have left companies considerable flexibility as to the structure of their articles where they choose to opt in to the breakthrough regime. Secondly, we understand that the majority of UK companies falling within the scope of the takeovers directive have only one class of share, which generally has voting rights. Such shares will be caught by the breakthrough provisions and by the definition that we propose. I beg to move.

Lord Sharman: My Lords, we return to a matter that we debated in Grand Committee; namely, the ability of the courts to exercise discretion in terms of sanctioning schemes of arrangements. The purpose of the amendment is to grant that discretion to the court even if the relevant classes have not beeen correctly constituted, provided that the fairness of the scheme is not affected in any way. The amendment also seeks to dispense with the requirement that a majority in number of the creditors or members must agree to a scheme of arrangement for it to be binding.
	The Law Society advised us that the amendment to Section 425 of the Companies Act on the lines recommended by the Company Law Review would enable the court to sanction a scheme of arrangement notwithstanding a technical defect in the constitution of classes, provided that the defect would not affect the fairness of the arrangement. We took note of the comments made by the noble and learned Lord, Lord Goldsmith, in Grand Committee, and the proposed new arrangement would allow the court to sanction the scheme only where the court was satisfied that the defect did not affect the fairness of the scheme—that is, if it was only a technical defect.
	In addition, we are pressing for the removal of the requirement for the approval of a scheme by a majority in number of those voting, as well as three-quarters by value. The majority in number test is not, as far as I am aware, contained anywhere else in company law and there is no special reason why such protection should be required for schemes of arrangement, but not for other corporate transactions. Indeed, the majority in number, focusing on a majority of registered holders is an anachronism, now that most retail holders hold through the CREST nominees, where one registered holder may represent many thousands of beneficial owners. It is also open to abuse by shareholders who could subdivide their holding through a number of nominee companies. I beg to move.

Lord McKenzie of Luton: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 483B, 483C, and 483D. Together the regulations to be made under this part of the Bill will determine the registration, reporting and disclosure requirements imposed by our company law on overseas companies, including the range of overseas companies to which the requirements apply and the offences for their breach. This part, together with the regulations to be made under it, replace the provisions made by Part 23 of the Companies Act 1985.
	Clause 678 imposes a disclosure requirement based on paragraph 3(e) of Schedule 21A to the Companies Act 1985 to disclose those persons resident in the UK authorised to accept service on the company's behalf. Amendment No. 483A makes clear that the clause does not impose a requirement on the overseas company to have anyone resident in the UK able to accept service on its behalf. If there are no such persons, the company must simply make a statement to that effect. Amendment No. 483B deletes Clause 679. The provision made by that clause is replaced by the new clause to be inserted by amendment 483C.
	Where an overseas company has registered particulars with the registrar following the opening of a branch in the United Kingdom, the new clause will enable regulations to require the overseas company to give notice to the registrar if it subsequently closes that branch. These disclosures are a requirement of the 11th company law directive. In addition, an overseas company that has registered particulars in other circumstances specified by regulations under Clause 669 may be required by regulations made under the new clause to give notice to the registrar if those circumstances cease to obtain. The regulations will require the notice to be delivered to the registrar for the part of the United Kingdom in which the branch was registered and may set deadlines for sending the information to the registrar.
	Finally, Amendment No. 483D makes clear that the relocation of a branch from one part of the United Kingdom to another is to be treated as the closing of the branch in one part and the opening in another. Such provision is currently made by Section 695A(4) of the Companies Act 1985, which is being repealed. I beg to move.

Lord McKenzie of Luton: In moving this amendment, I shall speak also to Amendments Nos. 483F, 483G, 487G and 528. These amendments relate to other enactments beyond the Companies Acts which confer functions on the registrar. Three of the amendments—Amendments Nos. 483E, 483F and 487G—make no real change of substance but are designed to introduce a little more clarity. At the moment the provision of the functions of the registrar in Clause 682, at the start of Part 26, refers generally to "other enactments" but does not list those enactments. In Clause 739, at the end of this part of the Bill, a list is provided, but it is arguably unclear what the effect is of the list in respect of some individual provisions. It is also not entirely clear whether the Bill or the existing enactments should apply to matters already covered by existing enactments. The amendments clarify the position.
	Amendments Nos. 483G and 528 do, however, make a change of substance to one of those enactments—the Limited Partnerships Act 1907. At the moment, enshrined in that Act is the provision that Companies House, when performing its functions, may only charge amounts varying from 2p to £2. The effect is that it is uneconomic for the registrar to offer certain optional services in respect of Limited Partnerships to customers, even where they have a need and are more than willing to pay the legitimate costs of the service being provided; other, mandatory, services have to be provided at a loss. This is creating difficulties in practice. In removing the statutory caps, the amendments will allow Companies House to develop services to meet customer demand and to charge for them in the normal way under Clause 684 of the Bill. I beg to move.

Lord McKenzie of Luton: My Lords, I move Amendment No. 487A and speak to Amendment No. 487C.
	During our debate last week about the new scheme for protecting directors' residential addresses, my noble friend Lord Sainsbury explained that the Government intended to lay an amendment that would provide a power to make regulations specifying circumstances in which a director's—or indeed anyone's—address may be removed from the public record. These amendments fulfil that promise.
	Under the new scheme introduced by our earlier amendments, a new director's home address will be protected. But there will continue to be an historic record with the home addresses of most of those who are directors when the Bill comes into force—and indeed of those who have previously been directors.
	In the vast majority of cases, removing an address from the record held by Companies House would serve little purpose: once an address has been placed on the public record, it immediately becomes widely available through a myriad of secondary sources. What has once been published cannot be made secret. The genie cannot be put back in the bottle. Nevertheless, we do recognise that there may be circumstances in which the continued appearance of a person's address on the public record held by Companies House is undesirable, possibly because it puts those who live there at serious risk. In reality this is only likely if, for some reason, the address is not also easily available elsewhere from other sources. On the other hand, those at risk are not only directors. For example, former directors and the families of deceased directors may be equally at risk. Therefore the amendments provide power to specify who may apply for their address to be taken off the public record.
	We intend to consult over draft regulations later this year so that they can be brought into force at the same time as the provisions providing protection for directors' home addresses.
	I am grateful to the noble Lords, Lord Freeman, Lord Hodgson and Lord Jenkin, for their withdrawing Amendments Nos. 112 to 114 and No.117. 1 hope they agree that this amendment meets their concerns. I beg to move.

Lord Hodgson of Astley Abbotts: I am grateful for that very considered response. I am also grateful to the noble Lord, Lord Sharman, for his support. Obviously I have listened carefully to the Minister. The noble Lord, Lord Sharman, made it clear that we are dealing with the evolution of voluntary disclosure. I do not flatter the Minister when I say he has had a distinguished business commercial career outside the House. He therefore understands the push and the pull underlying this clause. The concern is that once you hand this power to his successors, it will not always necessarily be used as sensibly as I am sure the Minister would use it. It is very widely drawn and extensive in the powers it gives to his successors; that is one of our concerns. We have no problem with enhancing shareholder engagement. Indeed, our discussions on Part 9 were exactly about that. I think we need to talk to people outside and read carefully what the Minister has said. We need to see whether his remarks carry any weight outside and to consult further. But for tonight, I beg leave to withdraw the amendment.

Lord Sainsbury of Turville: My Lords, this amendment introduces a new clause to follow Clause 881. It seeks to include a provision to ensure that things done in reliance on these provisions in the Companies Act 1985, which are repealed and replaced by the Bill, will continue to be legally effective.
	Articles of association, company resolutions and contracts are all likely to refer to provisions of the Companies Act or to rely for their effect on the way in which those provisions work. Except where we intend a change, those articles, resolutions and contracts should continue to have effect, not only with old references converted into new but also with their legal effect capable of continuing, despite verbal differences between the old and the new.
	This new clause applies automatically in all cases in which it is capable of applying. It is in addition to any more specific transitional provisions which may be included in the commencement orders by use of the power in the preceding Clause 881. It does not purport to be wholly comprehensive, but where it does apply it will avoid the need for equivalent provision to be made by possibly more than one order.
	The same amendment was brought forward in Grand Committee, but our debate was coloured there by what I suspect may have been slightly at crossed purposes. I hope, with the explanation I have provided today, we can agree the provision. I beg to move.

Lord Hodgson of Astley Abbotts: My Lords, I am not quite as happy as the Minister thought I might be. What we are concerned about is the question of the meshing of this piece of legislation with what went before. The Law Society still has some concerns about it. I wonder if it would be possible for the Minister, the Bill team and Government to consider whether we could have a schedule to the Bill which would consist of a table identifying which provisions in the Bill correspond to provisions being repealed for the purposes of this clause.
	There is certainly a concern which I explained on our last day in Committee about how these all mesh together. I said then that the new clause appears to apply only when existing provisions are re-enacted with or without modification. It does not appear to cover the situation where an existing provision is simply repealed without being re-enacted. I also think some of these concerns continue to persist in the world at large. We share the Government's view that we are trying to make company law comprehensible and accessible. Some practitioners and the Law Society feel that a schedule with a table would help bring the whole thing together. I wonder if the Minister could comment further on the possibility of some such arrangement being made available.

Lord Evans of Temple Guiting: My Lords, the draft National Assembly for Wales (Transfer of Functions) Order 2006 must be made by Order in Council following approval of the draft order by both Houses of Parliament. Section 22 of the Government of Wales Act 1998 enables a function of a Minister of the Crown to be transferred to the National Assembly for Wales upon receipt of this approval. That is why this short and, I hope, uncontentious order is before the House today. The Wales Office has worked closely with all relevant departments: the Department for Communities and Local Government—formerly the Office of the Deputy Prime Minister—the Department for Education and Skills and of course the National Assembly for Wales. Policy on these issues has been agreed by all parties in the Assembly.
	Turning to the draft order, two transfers will be effected or facilitated by the House approving this order. First, the most significant transfer to be effected by this order is the transfer to the Assembly of those fire safety functions, which at present remain with the UK Government. The case for this transfer has its genesis in the making of the Regulatory Reform (Fire Safety) Order 2005, which is a reform of all the current fire safety law that is contained in more than 100 separate pieces of fire safety legislation. The main substance of the RRO comes into force on 1 October 2006. The main emphasis of the reform will be towards fire prevention and a regime of fire risk assessment by the person responsible for their non-domestic premises, to identify, mitigate or remove any risk from fire to persons in or around the premises. The Fire and Rescue Services Act 2004 came into force in Wales in November 2004. Matters relating to fire and rescue authorities in Wales were conferred on the National Assembly for Wales by that Act. This transfer of functions order is consistent with that policy of devolution and will enable the National Assembly for Wales to act across the range of the regulatory reform order provisions; and thus give the National Assembly for Wales a comparable level of responsibility as will exist in England from 1 October 2006.
	The other function included in this omnibus order is the transfer of powers under Section 1 of the Education (Fees and Awards) Act 1983. This section currently enables the Secretary of State for Education and Skills to make regulations that allow certain institutions to charge higher fees to those students who cannot demonstrate a connection with the UK than to those who can. This change will enable the Assembly to make regulations regarding the charging of fees at universities and further education establishments in relation to Wales. The functions under Section 2 of the 1983 Act were previously devolved to the Assembly in 1999 and make similar provision for post-compulsory education awards by local education authorities. This split in responsibilities has made it increasingly complex to draft regulations under the 1983 Act, with some elements being made by the Assembly and others by the Secretary of State. Given the devolution of student support policy to the Assembly from the 2006–07 academic year, it is no longer appropriate for these powers to remain with the Secretary of State. The transfer will facilitate the creation of future policy and improve accountability for both the Assembly and the DfES. I commend the order to the House and I beg to move.
	Moved, That the draft order laid before the House on 24 April be approved [25th Report from the Joint Committee].—(Lord Evans of Temple Guiting.)

Lord Roberts of Conwy: My Lords, we are grateful to the Minister for presenting this order and explaining its purposes with such care. We are familiar with transfer of function orders in this House and this one appears to be as uncontroversial as the Minister claims. However, there are one or two questions that arise.
	The transfer of functions under Section 1 of the Education (Fees and Awards) Act 1983 is sensible, since policy responsibility for student support has, as the Minister said, been transferred to the National Assembly, along with the other functions available under the 1983 Act. It is, therefore, no longer appropriate for the Secretary of State for Education and Skills to retain the power under Section 1 to make regulations regarding the charging of higher fees to students in higher and further education who do not have the requisite connections with the United Kingdom. I assume that we are talking here about foreign students only, coming here from overseas for their final years of education, but I require an assurance that this is the case. There has been talk in Wales of charging different fees to students whose homes are in Wales and students from outside Wales, including England and Scotland. Could Section 1 be used to impose such differential rates either on its own or in tandem with Section 2 of the 1983 Act?
	As I understand it, top-up fees are to be introduced at Welsh institutions as from 2007–08. Students normally resident in Wales will get an Assembly grant of £1,800 annually towards their increased fees. English and Scottish students in Wales will not have such grants, nor will Welsh students attending English or Scottish universities. Is it the intention of the Assembly Government
	"to make regulations authorising or requiring certain institutions"—
	in the words of the Explanatory Notes—to charge fees on this basis? Perhaps the Minister would clarify the position once and for all. He made certain things clear in his opening statement, but further clarification would be helpful.
	As to the Regulatory Reform (Fire Safety) Order and the transfer of all functions under that very substantial order to the National Assembly, this is clearly a necessary consequence of the devolution of responsibility for the fire and rescue services that took place in November 2004. Where does that responsibility now lie in the Assembly and the Assembly Government? What is the title of the department? I ask because fire safety is very important and a number of significant powers will be transferred—for example, the power to make regulations about fire precautions, the power to authorise persons as the enforcing authority for certain non-domestic premises, the power to issue guidance to enforcing authorities, and the power to determine disputes.
	As the Minister said, fire safety law has been updated and reformed in recent years. The fire safety order is a part of that reform and it is important that it is properly implemented. The emphasis, as I understand it, is on fire prevention in the workplace and, under the order, the responsible person for each premise will be required to carry out an assessment of the risk of fire and take steps to reduce or remove the risk.
	All this spells careful control and supervision, especially in the early stages. What provision has been made at the Assembly or within the Assembly Government to carry out these functions adequately? I know that the National Assembly has been consulted on the order and has agreed to a modification of function—we are told this on page 5 of the 118-page document—and it would be good to know that preparations for receipt of these functions and their implementation are well in hand.
	I understand that the Assembly is currently considering a fire and rescue services charging order to enable the authorities to charge for the services they provide. These may include the removal of floodwater, rescuing people from lift cabins and giving advice on safety in premises where a trade, business or other undertaking is carried on. I shall say no more on that issue because I believe the order is still subject to discussion and not yet finalised. If the Minister could tell us the latest state of play in the Assembly Government in regard to this transfer of function, we would be very grateful.

Lord Evans of Temple Guiting: My Lords, I am extremely grateful to the noble Lords, Lord Roberts of Conwy and Lord Roberts of Llandudno, for their general support in welcoming these orders and for their questions.
	In response to the points raised by the noble Lord, Lord Roberts of Conwy, the transfer of the education function deals solely with powers enabling the drafting of regulations governing institutions charging higher fees for foreign students. It does not cover students from, or who can demonstrate a connection with, the UK. The Education (Fees and Awards) Act 1983 does not provide powers to set fee levels for students from the UK. The making of regulations that govern variable top-up fees, grants and loans are the subject of different legislation not before the House today, and are already devolved.
	To clarify the issue of student fees in Wales, however, under the Higher Education Act 2004 the Assembly Government will be making regulations that cover the arrangements for the 2007–08 academic year. Those regulations will enable students ordinarily resident in Wales and studying there to receive a fee remission grant of up to £1,800 towards university fees of a maximum £3,000. This has the effect of keeping the level of fees that Welsh-domiciled students have to find at £1,200, which is the current level of fixed fees in 2006–07. UK students from outside Wales studying at Welsh institutions and Welsh students studying outside Wales will not receive the grant. Cross-party support was given to this policy decision made by Members of the National Assembly for Wales in June 2005.
	The Fire and Rescue Services Act 2004 devolved to the National Assembly for Wales various powers in relation to fire and rescue authorities in Wales. Policy in this area is administered by the fire and rescue services branch of the Assembly Government's Social Justice and Regeneration Department. This department falls within the portfolio of the Minister for Social Justice and Regeneration, Mrs Edwina Hart AM. However, it should be noted that any relevant subordinate legislation in this area can only be made by the National Assembly for Wales itself.
	The Minister for Social Justice and Regeneration has established an advisory structure comprising representatives of fire and rescue authorities serving FRS personnel, communities, business and others to help inform FRS policy development in the round. In addition, the Assembly Government provide both revenue and capital funding for the service in Wales.
	In response to the two points raised by the noble Lord, Lord Roberts of Llandudno, I can confirm that hotels and guesthouses are included under the sleeping accommodation guide. In the matter of guidance on the location of aerial ladders for tall buildings, the Welsh Assembly Government published guidance on risk reduction planning, Fire and Rescue Service Risk Reduction Plan—Wales a Safer Country, on 21 March 2006. The guidance assists fire and rescue authorities in reducing risk while placing citizens, communities and stakeholders centre stage in the development of the FRA's agenda. While the guidance does not contain specific advice on the location of aerial appliances, it does provide a holistic approach to the management of service delivery, including the location and provision of fire resources. Fire and rescue authorities place resources such as aerial appliances where their chief fire officers determine as an operational matter where there is a high risk to life. I commend this order to the House.